Analyst Note| Matthew Dolgin, CFA |
CyrusOne’s fourth-quarter revenue and adjusted EBITDA were in line with FactSet consensus estimates; the firm had a good quarter of new lease signings; and it continues to make greater inroads into Europe, which is where we think it has more opportunity. But despite a backlog and company guidance implying a reacceleration of top-line growth in 2021, the firm seems unlikely to get back to the 20% or more annual revenue growth it produced each year prior to 2020. We think those higher growth rates would be necessary to make the stock attractive considering its level of spending. We are maintaining our $65 fair value estimate and think the stock is mildly overvalued.